ITunes helps Apple beat Q2 earnings expectations

Unit's sales outpaced growth of company's revenue

By Danny King -- Video Business, 4/22/2009

APRIL 22 | Apple's iTunes sales outpaced the growth rate of the company's total revenue as the digital content service appeared to defy the economic downturn that has caused packaged-media sales to slump.

Revenue from Apple's music-related products and services, which include iTunes store sales, jumped 19% from a year earlier to $1.05 billion for the quarter ended March 28 and accounted for 13% of the company's revenue, up from 12% a year earlier, the company said in a statement today.

Apple, maker of iMac computers, is helping lead the increase in digital-movie downloads as packaged-media sales fall. Although annual U.S. revenue stemming from DVD sales and rentals dropped 5.7% from 2007 to $21.7 billion, according to data compiled by Video Business and Rentrak, some analysts say sales from digital delivery of movies will more than double over the next five years.

The parent company's earnings rose 15% from a year earlier to $1.21 billion, or $1.33 a share, from $1.05 billion, or $1.16, a year earlier, as revenue rose 8.7% to $8.16 billion. Apple was expected to earn $1.09 a share on $7.96 billion in sales, the average analyst estimate in a Thomson Reuters survey.

Apple's iTunes store, the biggest U.S. music retailer, also has an inventory of more than 2,500 films, including more than 600 in high-definition, and more than 30,000 television episodes.

Apple's shares rose about 2% as of 5 p.m. Eastern time in after-hours trading.